Power Grid Corporation of India Limited (PowerGrid) has been awarded a major contract to set up a large-scale battery energy storage system (BESS) in Andhra Pradesh. The company informed stock exchanges that it was declared the successful bidder under the tariff-based competitive bidding framework, marking a critical step in strengthening grid-level energy storage in the state. The letter of award was received on December 29, 2025, formalizing the commencement of the project.
Project Capacity and Specifications
The initiative involves the development of a cumulative storage capacity of 2,000 MWh, structured as 1,000 MW with a two-hour storage duration, designed for on-demand usage. The project will be implemented under a Build-Own-Operate (BOO) model and is supported by Viability Gap Funding (VGF) through the Power System Development Fund (PSDF).
A key component of the mandate includes the establishment of a 150 MW / 300 MWh standalone BESS at the 400/220 kV sub-station at Kalikiri in Chittoor district, Andhra Pradesh. The facility will be set up at a designated APTRANSCO sub-station and is intended to enhance grid flexibility and reliability.
The BESS will play a vital role in meeting on-demand power requirements, while supporting the integration of renewable energy sources such as solar and wind into the state grid. The project aims to strengthen overall transmission infrastructure and contributes to national energy transition and grid modernization efforts.
Market Response
Despite the award, shares of PowerGrid were trading lower at ₹259.45 as of 4 PM on December 30, 2025, reflecting broader market movements or investor sentiment.
“The BESS project will play a crucial role in meeting on-demand power requirements while enhancing grid stability and reliability,” said PowerGrid, emphasizing the project’s importance for Andhra Pradesh’s energy infrastructure and its contribution to India’s larger renewable integration goals.
This award positions PowerGrid as a leader in grid-level energy storage and supports the broader development of large-scale battery storage solutions across India, reinforcing the company’s role in modernizing the power sector and enabling reliable renewable energy deployment.
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